# 2011: Economic growth to hit 3-4%! **URL:** \ **Category:** Great Debates\ **Created:** [December 30, 2010, 11:38pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890 "2010-12-30T23:38:19Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![wmfellows](https://avatars.discourse-cdn.com/v4/letter/w/c2a13f/32.png) [@wmfellows](https://boards.straightdope.com/u/wmfellows)\ **Post date:** [December 31, 2010, 11:28am UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/21 "2010-12-31T11:28:18Z")
> [@HRoark43](#): > > Isn’t it time the U.S. cut more taxes and stopped the expanding welfare rolls and unemployment extensions? The US Goverment would be daft and retarded to cut taxes presently, when more revenues are needed. Given your very weak employment growth, it would also be daft to cut unemployment support. To the extent economic growth will hold, maintenance of taxation revenues will be quite helpful to pay down deficits. And one constantly reads that the data show your main deficit drivers are not social spending but your military spending. A wee bit less adventurism and a wee bit more investment in real infrastructure would be rather better. > [@](#): > > They have an exploding federal deficit and this is going to weigh very heavily on the value of the US Dollar - think, higher gasoline prices. Arguing for tax cuts while simultaneously worrying about the central government deficit and your dollar value is… surreal and disconnected from any sort of proper economic analysis. > [@](#): > > In addition, extended unemployment benefits mean higher unemployment insurance premium (think: taxes) on employers… which will only serve to slow down hiring. Eh? Well I’ll let an American comment on this, perhaps your system is so daft that it works this way, but I have to suspect not. American labour flexibility is about the highest in the world - and the Scandinavian example shows that it is firing cost that is a real driver, less so than unemployment insurance costs, whatever bizarre fashion for early 19th century Victorianism seems to be prevalent amongst the American right. > [@](#): > > America needs to cut the dead weight and focus on letting productive people produce, or else they’re going to be crushed by all these welfare and welfare-equivalent payments and debt. I’d rather suggest that America needs less than fantastical wankery and more focus on the real drivers of its budget deficits - which are the various foreign military adventures it is wasting hundreds of billions of dollars on. It did in the UK and it will do in you. > [@SenorBeef](#): > > Things are slow. Cut taxes. Things are booming. Cut taxes! When is the time inappropriate to cut taxes? > > I also like how you manage, like pretty much every other “fiscal conservative” these days, to mention how taxes are too high and how we have an exploding deficit in the same paragraph. Do you know what tax cuts do the the deficits? This isn’t complex stuff. Quite, Mr. Senor Beef, quite. > [@Susanann](#): > > The problem is: that the people who get welfare are allowed to vote, and so they keep voting to get themselves more welfare/unemployment. Given the tiny percentage of persons on your welfare rolls, this is a right daft argument. > [@BrainGlutton](#): > > At this point, inflation, even hyperinflation Hyperfinlation is not a “best thing” - that is a mistake every bit as daft as the OP’s analysis. Hypeinflation would ruin the US every bit as badly as deflation. Moderate inflation is fine (and controlable), hyperinflation is a disaster. > [@](#): > > (Granted, it can also happen under conditions of continued economic stagnation, as in the 1970s – but only when there is a spike in some real external cost to the national economy, such as the price of imported petroleum, that has secondary effects on the real price of everything else; that’s not rooted in domestic monetary or fiscal policy, nor soluble through such alone.) Entirely fallacious argument. It can very well happen in domestic circumstances, with too much money being printed, whatever bad economics you’ve been reading. > [@emacknight](#): > > Or tariffs, can’t forget tariffs, all the cool countries are doing it. I heard Germany is cutting taxes AND increasing tariffs. False (never mind German tariff policy is also subject to EU and WTO engagements). ---
**Author:** ![Olentzero](https://avatars.discourse-cdn.com/v4/letter/o/90ced4/32.png) [@Olentzero](https://boards.straightdope.com/u/Olentzero)\ **Post date:** [December 31, 2010, 12:14pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/22 "2010-12-31T12:14:45Z")
> [@HRoark43](#): > > Aren’t there enough churches and charities for those who lack the skills to earn a living? They could also eliminate the education budget in all 50 states and privatize the system, but I doubt they’d ever amass the courage to do that. > > America needs to cut the dead weight and focus on letting productive people produce, or else they’re going to be crushed by all these welfare and welfare-equivalent payments and debt. > [@](#): > > "Are there no prisons?‘’ asked Scrooge. > > "Plenty of prisons,‘’ said the gentleman, laying down the pen again. > > "And the Union workhouses?‘’ demanded Scrooge. "Are they still in operation?‘’ > > "They are. Still,‘’ returned the gentleman, "I wish I could say they were not.‘’ > > "The Treadmill and the Poor Law are in full vigour, then?‘’ said Scrooge. > > "Both very busy, sir.‘’ > > "Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course,‘’ said Scrooge. "I’m very glad to hear it… I help to support the establishments I have mentioned: they cost enough: and those who are badly off must go there.‘’ > > "Many can’t go there; and many would rather die.‘’ > > "If they would rather die,‘’ said Scrooge, “they had better do it, and decrease the surplus population.” All that needs to be said here, I think. ---
**Author:** ![E-Sabbath](https://avatars.discourse-cdn.com/v4/letter/e/e19adc/32.png) [@E-Sabbath](https://boards.straightdope.com/u/E-Sabbath)\ **Post date:** [December 31, 2010, 12:35pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/23 "2010-12-31T12:35:09Z")
Hey! I quoted that in the LAST HRoark thread. No fair! (also, nobody got it.) ---
**Author:** ![HRoark43](https://avatars.discourse-cdn.com/v4/letter/h/bc8723/32.png) [@HRoark43](https://boards.straightdope.com/u/HRoark43)\ **Post date:** [December 31, 2010, 3:04pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/24 "2010-12-31T15:04:58Z")
> [@Fear\_Itself](#): > > How is cutting taxes going to achieve wealth redistribution? Wealth redistribution already occurs, naturally. It redistributes to those who are savvy enough to acquire it. ---
**Author:** ![HRoark43](https://avatars.discourse-cdn.com/v4/letter/h/bc8723/32.png) [@HRoark43](https://boards.straightdope.com/u/HRoark43)\ **Post date:** [December 31, 2010, 3:08pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/25 "2010-12-31T15:08:03Z")
> [@Robot\_Arm](#): > > Yeah, cut taxes; that’ll take care of nasty old Mr. Deficit. If you want job growth and economic growth you don’t spur it with taxes. Cut taxes and employers hire more. Look how fast Bush got out of 9/11 and the Enron mess in 2001 by enacting massive tax cuts. The U.S. should just cut out the income tax and replace it with a flat consumption tax. ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [December 31, 2010, 3:36pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/26 "2010-12-31T15:36:08Z")
> [@elucidator](#): > > Deficit? Cut taxes. Neuritis, neuralgia, heartbreak of psoriasis? Cut taxes. Existential angst, that run-down feeling? Inflation, deflation, electile dysfunciton? Cut taxes. If it doesn’t work? Cut taxes harder, faster, more! That’s the plan, Stan. For your…ummm…_enjoyment_: [House Republican Rule Changes Pave the Way For Major Deficit-Increasing Tax Cuts, Despite Anti-Deficit Rhetoric](http://www.cbpp.org/cms/index.cfm?fa=view&id=3359). That, combined with requiring [Constitutional cites on all legislation](http://www.washingtonpost.com/wp-dyn/content/article/2010/12/29/AR2010122904666.html) will surely save us! ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [December 31, 2010, 3:40pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/27 "2010-12-31T15:40:22Z")
> [@HRoark43](#): > > Wealth redistribution already occurs, naturally. It redistributes to those who are savvy enough to acquire it. While they manipulate the goverment and regulations so they can fuck over the rest of us while it rolls in for them. > [@HRoark43](#): > > If you want job growth and economic growth you don’t spur it with taxes. > > Cut taxes and employers hire more. Look how fast Bush got out of 9/11 and the Enron mess in 2001 by enacting massive tax cuts. > > The U.S. should just cut out the income tax and replace it with a flat consumption tax. Employers hire when they can no longer squeeze more work out of the employees. It has nothing to do with taxes. Taxes are only a relatively small portion of the total cost of doing business. And how much is covered by a consumption tax? ---
**Author:** ![wmfellows](https://avatars.discourse-cdn.com/v4/letter/w/c2a13f/32.png) [@wmfellows](https://boards.straightdope.com/u/wmfellows)\ **Post date:** [December 31, 2010, 5:23pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/28 "2010-12-31T17:23:18Z")
> [@HRoark43](#): > > If you want job growth and economic growth you don’t spur it with taxes. That all depends on where the tax rates are and what kinds of public investment may be needed. Ideological declarations like this are just plain bolshy kind of nonsense. > [@](#): > > Cut taxes and employers hire more. Look how fast Bush got out of 9/11 and the Enron mess in 2001 by enacting massive tax cuts. While not being familiar with the US case, the stark assertion is pure bollocks. Like all things, taxation levels changes are subject to diminishing (and even negative returns) in either direction. Given the US taxation levels, it is very hard to credit indeed that there are large returns to be had in lowering taxation, in particular given the US’s current debt loads. Indeed, given probable market reaction to such fiscal illiteracy, I would expect that it would be positively a negative return. > [@](#): > > The U.S. should just cut out the income tax and replace it with a flat consumption tax. That’s bloody daft, in particular in a very consumption heavy economy such as the US of A, and given the billions you need to raise to pursue the global military strength / force projection capacities the US seems to so much enjoy. > [@HRoark43](#): > > Wealth redistribution already occurs, naturally. It redistributes to those who are savvy enough to acquire it. You know mate, this kind of primitive economic thinking really went out with the 1930s. Primitive, backward economic analysis doesn’t do free markets any bit of good at all. It only makes the Left look good. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [December 31, 2010, 5:28pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/29 "2010-12-31T17:28:56Z")
> [@wmfellows](#): > > You know mate, this kind of primitive economic thinking really went out with the 1930s. Like Hell it did! It only hid its head. For a while. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [December 31, 2010, 5:29pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/30 "2010-12-31T17:29:36Z")
> [@HRoark43](#): > > Wealth redistribution already occurs, naturally. It redistributes to those who are savvy enough to acquire it. That is a flaw in capitalism that results in an unstable economy when wealth accumulates in the ‘savvy’ corner. High marginal tax rates make the rich richer, because the economy booms and their investments are more profitable. The problem is, they erroneously think they can have a robust economy and low taxes. Historically, this has never happened. More people have a higher income with high tax rates. I know that is an affront to your Randian sensibilites, but that is not important. Creating an economy that lifts the greatest number of people is the goal we should be striving for, not some kind of social Darwinism that rewards only the most selfish among us. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [December 31, 2010, 5:34pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/31 "2010-12-31T17:34:11Z")
> [@HRoark43](#): > > Cut taxes and employers hire more. Look how fast Bush got out of 9/11 and the Enron mess in 2001 by enacting massive tax cuts. Job creation during the Bush administration was the weakest in 40 years. The tax cuts failed in that respect. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [January 1, 2011, 5:18am UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/32 "2011-01-01T05:18:53Z")
> [@The\_Amazing\_Hanna](#): > > For this discussion to have any point, somebody needs to show that welfare really is a major problem, let alone crushing America. > > [This graph of welfare payments](http://en.wikipedia.org/wiki/File:Welfare_Benefits_Payments_Graph.gif) seems to suggest otherwise. That graph shows that welfare rates do not correlate closely with White House blueness; indeed the Clinton Adminstration famously reduced welfare. But anyway, it’s the expense of welfare for Halliburton, drug companies, etc. that poses a big burden today. > [@Susanann](#): > > The problem is: that the people who get welfare are allowed to vote, and so they keep voting to get themselves more welfare/unemployment. Wrong again. Voting redness no longer correlates closely with income or achievement. Many under-achieving are also under-informed, and that is a group on which red candidates depend. I’d post a cite, but you’d ignore it and come back with the same falsehoods next thread. :smack: (I use “red” as shorthand for the Stupidist movement, preferring not to malign the Grand Old Party of Abe and Teddy.) ---
**Author:** ![Olentzero](https://avatars.discourse-cdn.com/v4/letter/o/90ced4/32.png) [@Olentzero](https://boards.straightdope.com/u/Olentzero)\ **Post date:** [January 1, 2011, 7:46pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/33 "2011-01-01T19:46:47Z")
> [@E-Sabbath](#): > > Hey! I quoted that in the LAST HRoark thread. No fair! (also, nobody got it.) I plead first time in an **HRoark** thread. If I’d seen the last one I’d have left well enough alone. (I also would have gotten it.) ---
**Author:** ![The\_Hamster\_King](https://avatars.discourse-cdn.com/v4/letter/t/8edcca/32.png) [@The\_Hamster\_King](https://boards.straightdope.com/u/The_Hamster_King)\ **Post date:** [January 1, 2011, 8:08pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/34 "2011-01-01T20:08:34Z")
> [@HRoark43](#): > > Cut taxes and employers hire more. No. Employers hire more when \*demand \*increases. If you cut taxes without increasing demand, then employers will just pocket the windfall. Why would you hire new people if there’s no work for them to do? That would be stupid. Why is it that libertarians seem to know so little about how businesses actually run? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 1, 2011, 9:42pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/35 "2011-01-01T21:42:00Z")
> [@The\_Hamster\_King](#): > > Why is it that libertarians seem to know so little about how businesses actually run? For exactly the same reason as with socialists: They don’t **care.** “It is all very well in practice, but it will never work in theory.” ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [January 1, 2011, 9:48pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/36 "2011-01-01T21:48:25Z")
> [@HRoark43](#): > > Look how fast Bush got out of 9/11 and the Enron mess in 2001 by enacting massive tax cuts. How did Bush get out of 9/11? Did his leadership enable the calendar to go to 9/12? Or was it that brilliant move of invading a nation that had nothing to do with it? And if those tax cuts were so brilliant, why didn’t they work then and why aren’t they working now? ---
**Author:** ![Olentzero](https://avatars.discourse-cdn.com/v4/letter/o/90ced4/32.png) [@Olentzero](https://boards.straightdope.com/u/Olentzero)\ **Post date:** [January 1, 2011, 11:48pm UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/37 "2011-01-01T23:48:45Z")
> [@BrainGlutton](#): > > For exactly the same reason as with socialists: They don’t **care.** I’ve had quite enough of you speaking for me, thank you. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 2, 2011, 12:11am UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/38 "2011-01-02T00:11:38Z")
> [@HRoark43](#): > > Look how fast Bush got out of 9/11 and the Enron mess in 2001 by enacting massive tax cuts. > [@BobLibDem](#): > > How did Bush get out of 9/11? Did his leadership enable the calendar to go to 9/12? Or was it that brilliant move of invading a nation that had nothing to do with it? And if those tax cuts were so brilliant, why didn’t they work then and why aren’t they working now? And, how did Bush “get out of” [the Enron mess](http://en.wikipedia.org/wiki/Enron_scandal)? The company went bankrupt, employees lost their pensions, some executives went to prison or the grave, the door to the empty barn was closed by the Sarbanes-Oxley Act, and the whole thing played out . . . exactly as it would have if there had been no tax cuts. Come to think of it, why would anyone even **mention** tax cuts in this connection? ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [January 2, 2011, 6:00am UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/39 "2011-01-02T06:00:09Z")
> [@The\_Hamster\_King](#): > > No. Employers hire more when \*demand \*increases. If you cut taxes without increasing demand, then employers will just pocket the windfall. Why would you hire new people if there’s no work for them to do? That would be stupid. > > Why is it that libertarians seem to know so little about how businesses actually run? Maybe they do, and it’s your viewpoint that is simplistic. If only the world was so simple that the government could just ‘stimulate demand’ with borrowed money and everything would be okay. That may work very temporarily, but in the long run real demand has to come out of the real needs of people, and paid for through earnings made through productive labor. If everyone wants a hammer, but all the businesses make screwdrivers, then no amount of stimulus of demand is going to create a healthy economy. Sure, people can buy lots of screwdrivers, but they’re not what they want or need. Real demand is a dependent variable of real production. They are the yin-yang of the economic contract. You can’t ignore one and attempt to fix the economy by manipulating the other. Note that Apple is having no trouble selling all the iPads it can make. That’s because its business activity happens to align with the desires of the population. Also notice that despite all kinds of ‘stimulus’ of real estate, there’s still a huge glut of housing and prices are still falling. That’s because people don’t want as many houses as already exist. There’s a mismatch between production and consumption, and you can’t fix that by propping up consumption. These days, amateur Keynesians seem to be completely single-tracked - the answer to all our problems is to simply continue stimulating demand. Drop more money from helicopters, and people will buy more things, and that means businesses will hire, and everything will be great. What they seem to forget is that even Keynes specified this as a remedy only under very unique circumstances - not as the main mechanism for maintaining a healthy economy. A healthy economy requires many things - a good business environment, low friction between economic transactions, information availability, free trade, property rights, all kinds of things. Sometimes an economy can have demand depressed by recession or fear, and it might be a reasonable course to stimulate demand through government action. Other times the economy may suffer from barriers to trade or production, and the correct answer is to lower barriers to trade and production. Sometimes an economy can suffer from malinvestment due to distortions in the economy, meaning that the producers aren’t making what consumers want. In that case, you need to allow the economy to correct itself, and attempting to maintain the status quo by bribing consumers with stimulus money to buy what they don’t want or need is the absolute worst thing you could do. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [January 2, 2011, 6:35am UTC](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890/40 "2011-01-02T06:35:16Z")
> [@Sam\_Stone](#): > > Maybe they do, and it’s your viewpoint that is simplistic. > > If only the world was so simple that the government could just ‘stimulate demand’ with borrowed money and everything would be okay. > > … An interesting post, but who are you debating with? Eight paragraphs arguing against government stimulus of the economy, and the subject hadn’t even been brought up yet.[sup]1[/sup] Is it possible you meant to post this in some other thread? 1. There was a post by **Digital Stimulus** , but I think that means something else. [Previous page](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890.md?page=1) [Next page](https://boards.straightdope.com/t/2011-economic-growth-to-hit-3-4/565890.md?page=3)